So What? December 2016 Edition

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Sandwiches: #NationalSandwichDay

Summary: Sandwiches, a staple in American cuisine strutted their innovations November 3rd on National Sandwich Day. For starters, sandwiches are dominating breakfast menus; not just the traditional breakfast egg sandwiches, try fried chicken on donuts. Global (e.g., Vietnamese Banh Mi) and regional (e.g., Philly Cheese Steak) sandwiches are gaining popularity. Lighter, healthier options are also surfacing especially for the plant-based crowd.

So What: Sandwiches will always be a prominent menu item in QSR.

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Beverages: Dairy and Dairy Alternatives

Summary: Packaged Facts projects steady growth for dairy and dairy alternative beverages – compound annual growth of 5.8 percent from 2015 to 2019; total market an estimated $31.5 billion in 2019. New premium and innovative products will fuel the growth, but the market will continue to be dominated by private label brands (half the total market size). Almond, soy, cashew and coconut plant-based milks are gaining traction thanks to their health attributes.

So What: Dairy alternative beverages represent a future opportunity for operators looking to capitalize on the seasonal beverage trend (LTOs).

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Desserts: Ice Cream Insanity

Summary: Can you imagine avocado and roasted beet flavored ice cream. How about sweet potato? Consumers are becoming flavor junkies according to trendspotter consultancy company Baum + Whiteman. In addition to savory flavors for ice cream, they predict that ice cream with Global inspirations including new formats (a.k.a. mashups) will become popular like the “freakshake” from Australia – milkshakes topped with cookies, cakes, donuts or candy.

So What: Ice cream and milkshakes will become a new area of indulgent innovation for foodservice in 2017.

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Bakery: Labeling Barriers

Summary: Informed consumers are demanding “clean labels.” Providing natural flavors and colors, especially in baked goods/snacks presents a challenge, since their properties break down over the product’s shelf life (less intense in nature). The consistent supply and cost of natural ingredients represents a barrier for most manufacturers. They also need to closely monitor their processing technology (e.g., oven temperatures) to insure the final products meet their high-quality standards.

So What: Spicy and Global flavors that are currently on trend with consumers enable manufacturers to break artificial labeling barriers and deliver products that are more natural. Taste good too!

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Consumerism: Global Flavors 2017

Summary: Internationally flavored dishes will fuel the spice and flavor market in 2017; Asian and Indian cuisine are driving factors. The category will exceed $6 billion (Technavio) by 2020, an increase of roughly $2 billion from 2015. Millennials are the leading demographic seeking exotic flavors, especially those that add heat to their favorite dishes. Spice blends are also gaining consumer preference (e.g., vadouran a mashup of Indian curry and French aromatics).

So What: Spices and spice blends are having a major impact on the American palate.

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Consumerism: Power To The Plants

Summary: Experts continue to forecast that plant-based proteins will become more extensive as more manufacturers/investors acquire stakes in companies that specialize in products of this nature (e.g., Tyson Foods – Beyond Meat). In addition to technology innovating more plant-based alternatives to animal products, Mintel envisions a broader growth trend and labels this movement: “Power To The Plants” as the food industry introduces and markets food and beverage (e.g., vegan, vegetarian) items that emphasize plants as key ingredients.

So What: Consumer veggie centricity will become more widespread!

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Consumerism: Protein Obsession

Summary: 63 percent of consumers (Mintel) are looking for protein when it comes to seeking healthy products, ahead of fiber and whole grain claims. Per capita, per day, Americans consume 48.5 grams of protein from fresh foods, 54.2 grams from packaged foods – in total twice as much protein recommended by the new dietary guidelines. Now, with plant-based proteins gaining inroads, the amount of protein consumed by Americans will continue to grow.

So What: Labeling opportunity: “Excellent source of protein” – Increased sales!

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Segment Competition: C-stores: Year-End Update

Summary: Perrino & Associates want to close out 2016 by once again highlighting how C-stores thanks to a more diverse/sophisticated selection of food & beverage represent a huge threat to QSRs. NPD reports (period ended August 2016) that their consumer visitation rose to 10%, up for 9.3% in 2011. Price and brand loyalty among younger consumers (note: the utilization of technology – apps) have been driving factors.

So What: On a market by market basis, QSRs need to benchmark competitive C-store loyalty programs and retool their programs accordingly.

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